MediaFile

Facebook, is this the best you can do?

In the world of Internet IPOs, it doesn’t get bigger than this: Facebook, the world’s biggest social network, files for the biggest ever Internet IPO! On first glance, everything about it seems outsize: The company’s raising $5 billion! It made $3.7 billion in revenue last year! And $1 billion in net income! Even the stated mission — “to make the world more open and connected” — is impossibly expansive. It’s all so expectedly huge it’s almost bland.

Here’s the thing about the big, honking 187-page prospectus Facebook filed late Wednesday. Once you dig past those headline numbers, the company itself ends up looking pretty unremarkable — kind of like the lives portrayed in the typical Facebook timeline. You end up wondering if its best years aren’t already behind it.

Facebook’s revenue grew 69 percent in 2010. That’s down from 154 percent in 2009, but still not bad at all. It’s much better than the 29 percent growth rate Google saw last year, and close to the 68 percent growth rate for Apple. But those companies are much larger (Facebook’s 2011 revenue was less than 3 percent of Apple’s). And for Facebook, there are signs that its growth rate is already starting to slow dramatically.

In the first quarter of 2011, Facebook’s revenue grew 112 percent from the same quarter a year earlier. It also doubled in the second and third quarters. But in the fourth quarter, the growth rate slowed to 55 percent. And for advertising revenue, which makes up 85 percent of the company’s total revenue, the growth was even slower: 44 percent. Meanwhile, Facebook’s operating margin has declined over the past year, to 48 percent last quarter from 60 percent in late 2010.

What happened? One factor, according to the prospectus, is the “product changes that significantly increased the number of ads on many Facebook pages beginning in the fourth quarter of 2010.” By squeezing more ads onto its site, Facebook goosed revenue through 2011. But unless it can follow up with another plan to boost revenue, ad revenue growth could slow to 40 percent or less in 2012 — much closer to Google’s recent growth.

IPOverload: Facebook goes public

The least suspenseful waiting game in Silicon Valley is now over, thank heavens. Facebook, which began as a decidedly private Harvard hangout, has begun the process of going absolutely, totally, unabashedly public.

Facebook filed for an initial public offering with the SEC Wednesday, which means we have the first raw glimpse of its financials. Advertising makes up 85 percent of its $3.7 billion in annual revenue. And it took in $1 billion of income in 2011. For more of the best data points, see my colleague Anthony De Rosa’s rundown.

Facebook is synonymous with the Internet in many ways: It boasts more than 10 percent of the world’s population as active users and has realizable ambitions to be the preeminent vetting service on the Net, making a “Like” as powerful and capricious as Caesar’s opposable thumb.

Zynga’s Pincus fights back against copycat accusations

Mark Pincus, the CEO of Zynga, isn’t pleased with reports that Zynga is ripping off games from small developers so he is doing something about it–wielding his pen to write passionate manifestos to employees invoking Silicon Valley greats like Apple.

After a game developer accused Zynga of copying a game called “Tiny Tower”,  Pincus sent a 60-line memo to employees to make sure his flock knows Zynga has done nothing wrong, (the memo was leaked to the blog VentureBeat and later obtained by Reuters).

“Google didn’t create the first search engine. Apple didn’t create the first mp3 player or tablet. And, Facebook didn’t create the first social network. But these companies have evolved products and categories in revolutionary ways.”

Tech wrap: Apple cares, says CEO Tim Cook

Apple has never turned “a blind eye” to the problems in its supply chain and any suggestion it does not care about the plight of workers is “patently false,” Apple Chief Executive Tim Cook said in an email to employees. Cook was responding to a report in The New York Times about working conditions at Apple’s main contract manufacturer, Foxconn, in China, an issue that for years has been a thorn in the company’s side.

Facebook plans to file documents as early as Wednesday for a highly anticipated IPO that will value the world’s largest social network at between $75 billion and $100 billion, the Wall Street Journal cited unidentified sources as saying on Friday.

Jon Rubinstein, who was instrumental in crafting Apple’s iPod music player, has left Hewlett Packard after two years on the job there. Rubinstein was CEO of smartphone maker Palm when that company was acquired by HP in 2010. He last held a product-innovation role within HP’s Personal Systems Group headed by Todd Bradley.

Fear not Google’s bid to rock ‘n’ rule your world

 

Stop me if you’ve heard this one:

Big social media company changes its privacy rules. The Internet goes nuts. The tech press fuels the flames. Much hand-wringing and shouts of promises not kept ensue.

Sound familiar?

This time it’s not Facebook’s Mark Zuckerberg who’s losing sleep. It’s Google’s Larry Page. The search giant changed its rules mid-game, and it’s getting an earful.

Google’s privacy changes are both less and more than meets the eye. The less: Google has been collecting all the data in question already, most for a long time. The more: It’s one thing to collect data, quite another to change how you use it without giving your customers any flexibility. Google should be lauded for über transparency, but it’s hard to like ”Our Way or the Highway.”

Tech wrap: Netflix gets subscribers back

Netflix’s fourth-quarter revenue outpaced Wall Street’s expectations as the video rental website reversed subscriber losses to sign up more than 600,000 new U.S. customers in the period, pushing its shares up. Netflix posted a 47 percent leap in fourth-quarter revenue to $876 million, outpacing an average forecast for $857.9 million, according to Thomson Reuters I/B/E/S.

Symantec took the rare step of advising customers to stop using one of its products, saying its pcAnywhere software for accessing remote PCs is at increased risk of getting hacked after blueprints of that software were stolen. The announcement is the company’s most direct acknowledgement to date that a 2006 theft of its source code put customers at risk of attack. Also on Wednesday, Symantec reported a higher quarterly profit and issued an outlook in line with Wall Street estimates.

Europe proposed strict new data privacy rules, putting greater responsibility on companies such as Facebook to protect users’ information, and threatening those who breach the code with hefty fines. But the move, which legislators say is designed to better defend children against predators, has rattled major technology and Internet-based companies, with executives concerned the legislation will be almost impossible to implement in full or will do serious damage to their business models.

Facebook’s new class of apps expand the social vocabulary

Time was when “liking” something on Facebook was the standard way to recommend something on the social network.

Now Facebook users will have a whole new vocabulary at their disposal so they can tell friends they “want” tickets to an upcoming rock concert, they are “cooking”  a certain dish or that they “ran” five miles in the park after work.

On Wednesday evening, Facebook announced the availability of more than 60 third-party appsthat can be integrated directly into Facebook, including apps from Ticketmaster, Airbnb, Foodspotting and Pinterest. Facebook also said that any software developer can now create their own such specialized apps for Facebook integration and submit the app to Facebook for approval.

Tech wrap: Wikipedia, Google protest anti-piracy bill

The English homepage of Wikipedia went dark and Google’s search page ran the logo “Tell Congress: Please don’t censor the web!” in protest of legislation designed to stop copyright piracy but the free online encyclopedia says “could fatally damage the free and open Internet.” Big tech names including Facebook and Twitter declined to participate in protests of the House of Representatives’ Stop Online Piracy Act and the Senate’s PROTECT Intellectual Property Act, despite their opposition to the legislation, unwilling to sacrifice a day’s worth of revenue and risk the ire of users.

European regulators will decide around the end of March whether to file a formal complaint against Google for misuse of its market position, EU Competition Commissioner Joaquin Almunia told Reuters. Until this point officials had been playing down expectations of an early conclusion to the informal investigation stage, although there still could be a long way to go. Antitrust investigations typically take several years.

EBay’s fourth-quarter profit jumped as the e-commerce company saw solid growth in its online marketplaces and an increase in transactions processed through its PayPal electronic payments business. The operator of the world’s largest online marketplace reported fourth-quarter net income of $2 billion, or $1.51 a share, compared with $559 million, or 42 cents a share, a year earlier. Revenue rose 35 percent to $3.38 billion.

Tech wrap: Microsoft presses pause on Web TV

Microsoft has put its talks with media companies about an online subscription service for TV shows and movies on hold, according to people familiar with the discussions. The company had been in intense talks with potential programming partners for over a year and was hoping to roll out the service in the next few months. But it pulled back after deciding that the licensing costs were too high for the business model Microsoft envisaged, the sources said.  Microsoft is still working to distribute TV shows over the Web, focusing on delivering programming via its Xbox gaming system to existing cable subscribers.

Dell intends to launch its first consumer tablet computer in late 2012, marking its entry into a hotly contested arena that has already claimed arch-foe HP. The Texas company had dipped its toe in the waters with an enterprise-focused, “Streak” tablet. Chief commercial officer Steve Felice was coy about which operating system Dell might adopt — Microsoft’s upcoming Windows 8 or Google’s Android — saying both were viable options. But Felice did say he liked the feel of Microsoft’s touch-enabled OS, which would be well-timed when it emerges later this year.

According to an Ipsos/Reuters poll, more than 10 percent of parents around the world say their child has been cyberbullied and nearly one-fourth know a youngster who has been a victim. The online poll of more than 18,000 adults in 24 countries, 6,500 of whom were parents, showed the most widely reported vehicle for cyberbullying was social networking sites likes Facebook, which were cited by 60 percent. Mobile devices and online chat rooms were a distant second and third.

Tech wrap: Nokia throne in Samsung’s sights

Samsung CEO Choi Gee-sung told reporters in Las Vegas the company overtook Nokia in handset revenue terms in its latest reported quarter and was confident of topping the Finnish group in shipments this year. Samsung’s bullish forecast is in line with some analysts, including Royal Bank of Scotland, but on average analysts have expected Nokia to keep its lead on the market. According to the latest polls by Reuters, Nokia was expected to sell 418 million phones in 2011, versus Samsung’s 320 million, the gap narrowing this year to 388 million versus 359 million.

Google made changes to its search engine, combining content posted by users of Google’s social network Google+ and pic sharing site Picassa with regular search results. Links shared by a Google+ user’s connections are given more weight and will show up in Web search results with a person icon beside them, VentureBeat’s Jolie ‘Odell writes. The changes increase Google+’s prominence online, which is lagging behind Facebook in total number of users.

Sony’s videogaming business, led by its just-launched handheld “Vita”, will prove pivotal in returning the company to profitability, Kazuo Hirai, the executive pegged to succeed Howard Stringer as president, said.